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POLITICAL COMMENT: Let’s boost social housing and supply of new homes

We all know that Oxford is in the grip of a major housing crisis. Thousands are on our housing waiting list, average house prices are approaching £400,000, and “affordability”, whether for those looking to rent in the private sector, or to buy a property, is a disaster, with the relationship between private rents and incomes, or house prices and incomes, worse than almost anywhere else in the country.

Oxford is now quite unusual in not only requiring 50 per cent of new housing developments to be “affordable”, but for 80 per cent of that housing to be “social rented”.

This means rents for the new properties are at a level of around 40 per cent of market levels.

This flies in the face of the Tory/Lib Dem government policy – they argue that new “affordable” housing should be at 80 per cent of market levels.

We’ve been told that we will only get Government grants for new homes if we agree that most will be at this higher level, and housing associations are also being instructed to double the rent on properties when they become vacant, so that new tenants have to pay the new, “affordable” rent.

In doing this, the Government hopes that the higher level of rental income will be reinvested in new housing. But it is a critical miscalculation.

First, rents are so expensive in Oxford that “affordable” rents at 80 per cent of the market level are simply not affordable for people on modest or even middle incomes.

By my calculations, someone renting a three-bedroom house at this “affordable rent” level would need to be earning at least £34,000 per year to be able to afford it – actually well above the average for the city.

Secondly – but related – what this means is that more tenants would have to rely on state support to fund their living costs.

This would drive the nation’s housing benefit bill higher still.

It is worth remembering, every time you hear a Government minister complaining about “soaring benefit bills”, that by forcing council and housing association rents up, they are actively making the situation worse.

The other major change the coalition Government has introduced is that councils and housing associations are now able, and indeed encouraged, to offer short tenancies (often as short as three years) to their tenants.

The idea is superficially attractive – when people no longer need the property, they are reassessed, move out, and a place is freed up for new tenants.

However, in practice it is a disaster. It sends an awful message to tenants: if you do well and get an income above a certain level, your landlord can end your tenancy and force you out of your home.

It means that increasingly areas of council and housing associations homes will have in them a concentration of the very poorest in society, rather than having a genuinely mixed community.

It puts council and housing association tenants in the position of being “second-class citizens”, without the security of those who own their own homes.

In Oxford, we haven’t introduced these new, time-limited tenancies in our council stock, and discourage housing associations from doing so.

I’m in favour of a completely different vision of social housing – where council and housing association homes are once again available for local people of all backgrounds, at a rent they can afford, and in particular to the growing number of Oxford people who stand no chance of buying a house, can’t afford private rents, and are in effect being forced out of the city they love.

I also want to see the same level of security enjoyed by council and housing association tenants as for owner occupiers.

This would make a huge difference to our city, and would save the Government money on the housing benefit bill too.

There are two things that would need to happen, though: first, Government would need to prioritise investment in social housing. And second, we need greatly to increase housing supply, even if it means offending a few people in the process.

Comments

Gunslinger
11:59am Thu 27 Feb 14

The other point of view is that the proportions should be reversed, so that only 20% (or less) of 'affordable' housing is social.

Apart from pepetuating a dependency culture where availability of social housing at a subsidised cost is seen as a 'right', Cllr Seamon's policies mean that those who do wish to move on and buy their own property ARE forced out of Oxford because of a lack of availability.

House prices are prohibitively expensive precisely because there is a shortage of suitable housing for first time (and other) buyers.

Unfortunately Conservative and LibDem politicians seem unable to get a grip on this too, partly because of NIMBY pressure from their own supporters wishing to maintain the amenities (and value) of their own existing properties - no doubt dressed up as concern for badgers, snails, bats etc.

The other point of view is that the proportions should be reversed, so that only 20% (or less) of 'affordable' housing is social.
Apart from pepetuating a dependency culture where availability of social housing at a subsidised cost is seen as a 'right', Cllr Seamon's policies mean that those who do wish to move on and buy their own property ARE forced out of Oxford because of a lack of availability.
House prices are prohibitively expensive precisely because there is a shortage of suitable housing for first time (and other) buyers.
Unfortunately Conservative and LibDem politicians seem unable to get a grip on this too, partly because of NIMBY pressure from their own supporters wishing to maintain the amenities (and value) of their own existing properties - no doubt dressed up as concern for badgers, snails, bats etc.Gunslinger

The other point of view is that the proportions should be reversed, so that only 20% (or less) of 'affordable' housing is social.

Apart from pepetuating a dependency culture where availability of social housing at a subsidised cost is seen as a 'right', Cllr Seamon's policies mean that those who do wish to move on and buy their own property ARE forced out of Oxford because of a lack of availability.

House prices are prohibitively expensive precisely because there is a shortage of suitable housing for first time (and other) buyers.

Unfortunately Conservative and LibDem politicians seem unable to get a grip on this too, partly because of NIMBY pressure from their own supporters wishing to maintain the amenities (and value) of their own existing properties - no doubt dressed up as concern for badgers, snails, bats etc.

Score: 1

museli
1:19pm Thu 27 Feb 14

I agree with the essence of what Ed Turner is saying but we can't have a truly fair deal for tenants without rent control. The 'free market' fantasy that by building enough housing to fully supply demand we will see rents and prices drop to affordable levels will never happen. The present situation is that huge amounts of tax payers money is used subsidising underpaying employers and overcharging landlords.

So yes lets reverse the damage Thatcher did to the public housing sector and reduce dependency on the buy to let bandits but meanwhile we must take measures to reduce house prices and rents by placing legal limits private rents and bringing in harsh penalties for those who sit on empty properties be they landlords or developers.

I agree with the essence of what Ed Turner is saying but we can't have a truly fair deal for tenants without rent control. The 'free market' fantasy that by building enough housing to fully supply demand we will see rents and prices drop to affordable levels will never happen. The present situation is that huge amounts of tax payers money is used subsidising underpaying employers and overcharging landlords.
So yes lets reverse the damage Thatcher did to the public housing sector and reduce dependency on the buy to let bandits but meanwhile we must take measures to reduce house prices and rents by placing legal limits private rents and bringing in harsh penalties for those who sit on empty properties be they landlords or developers.museli

I agree with the essence of what Ed Turner is saying but we can't have a truly fair deal for tenants without rent control. The 'free market' fantasy that by building enough housing to fully supply demand we will see rents and prices drop to affordable levels will never happen. The present situation is that huge amounts of tax payers money is used subsidising underpaying employers and overcharging landlords.

So yes lets reverse the damage Thatcher did to the public housing sector and reduce dependency on the buy to let bandits but meanwhile we must take measures to reduce house prices and rents by placing legal limits private rents and bringing in harsh penalties for those who sit on empty properties be they landlords or developers.

Score: 0

Dick Wolff
4:23pm Thu 27 Feb 14

From an article by James Meek in the London Review of Books:Right to Buy thus created an astonishing leak of state money – taxpayers’ money, if you like to think of it that way – into the hands of a rentier class. First, the government sold people homes it owned at a huge discount. Then it allowed the original buyers to keep the profit when they sold those homes to a private landlord at market price. Then the government artificially raised market rents by choking off supply – by making it impossible for councils to replace the sold-off houses. Then it paid those artificially high rents to the same private landlords in the form of housing benefit – many times higher than the housing benefit it would have paid had the houses remained in council hands.
In other words, since Thatcher, the British government has done the exact opposite of what it has encouraged households to do: to buy their own homes, rather than renting. Thatcher and her successors have done all they can to sell off the nation’s bricks and mortar, only to be forced to rent it back, at inflated prices, from the people they sold it to. Before Right to Buy, the government spent a pound on building homes for every pound it spent on rent subsidies. Now, for every pound it spends on housing benefit, it puts five pence towards building.

The response of the current government to the housing crisis is to try to make it worse. It is taking steps to increase house prices, without taking steps to increase supply. The coalition’s two most explicit interventions in the housing market have been to restrict supply and raise prices.

From an article by James Meek in the London Review of Books:Right to Buy thus created an astonishing leak of state money – taxpayers’ money, if you like to think of it that way – into the hands of a rentier class. First, the government sold people homes it owned at a huge discount. Then it allowed the original buyers to keep the profit when they sold those homes to a private landlord at market price. Then the government artificially raised market rents by choking off supply – by making it impossible for councils to replace the sold-off houses. Then it paid those artificially high rents to the same private landlords in the form of housing benefit – many times higher than the housing benefit it would have paid had the houses remained in council hands.
In other words, since Thatcher, the British government has done the exact opposite of what it has encouraged households to do: to buy their own homes, rather than renting. Thatcher and her successors have done all they can to sell off the nation’s bricks and mortar, only to be forced to rent it back, at inflated prices, from the people they sold it to. Before Right to Buy, the government spent a pound on building homes for every pound it spent on rent subsidies. Now, for every pound it spends on housing benefit, it puts five pence towards building.
The response of the current government to the housing crisis is to try to make it worse. It is taking steps to increase house prices, without taking steps to increase supply. The coalition’s two most explicit interventions in the housing market have been to restrict supply and raise prices.Dick Wolff

From an article by James Meek in the London Review of Books:Right to Buy thus created an astonishing leak of state money – taxpayers’ money, if you like to think of it that way – into the hands of a rentier class. First, the government sold people homes it owned at a huge discount. Then it allowed the original buyers to keep the profit when they sold those homes to a private landlord at market price. Then the government artificially raised market rents by choking off supply – by making it impossible for councils to replace the sold-off houses. Then it paid those artificially high rents to the same private landlords in the form of housing benefit – many times higher than the housing benefit it would have paid had the houses remained in council hands.
In other words, since Thatcher, the British government has done the exact opposite of what it has encouraged households to do: to buy their own homes, rather than renting. Thatcher and her successors have done all they can to sell off the nation’s bricks and mortar, only to be forced to rent it back, at inflated prices, from the people they sold it to. Before Right to Buy, the government spent a pound on building homes for every pound it spent on rent subsidies. Now, for every pound it spends on housing benefit, it puts five pence towards building.

The response of the current government to the housing crisis is to try to make it worse. It is taking steps to increase house prices, without taking steps to increase supply. The coalition’s two most explicit interventions in the housing market have been to restrict supply and raise prices.

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